Iraq War was boon for area contractors

This Thursday, March 14, 2013 photo shows a general view of the crossed swords monument at the site of an Associated Press photograph taken by Karim Kadim of U.S. soldiers taken on Nov. 16, 2008. The crossed-sword archways Saddam Hussein commissioned during Iraq’s nearly eight-year war with Iran stand defiantly on a little-used parade ground inside the Green Zone, the fortified district that houses the sprawling U.S. Embassy and several government offices. Iraqi officials began tearing down th
— AP

This Thursday, March 14, 2013 photo shows a general view of the crossed swords monument at the site of an Associated Press photograph taken by Karim Kadim of U.S. soldiers taken on Nov. 16, 2008. The crossed-sword archways Saddam Hussein commissioned during Iraq’s nearly eight-year war with Iran stand defiantly on a little-used parade ground inside the Green Zone, the fortified district that houses the sprawling U.S. Embassy and several government offices. Iraqi officials began tearing down th
/ AP

The Iraq War launched with an aerial “shock and awe” bombardment of Baghdad and elsewhere 10 years ago on this date quickly led to an explosion in San Diego’s military contracts as billions of dollars poured into support the U.S. and coalition effort.

Large firms such as Science Applications International Corporation saw their work mushroom as the war dragged on, while dozens of smaller companies also landed Pentagon contracts to serve the machinery of war.

More than $100 billion of the $767 billion the U.S. has spent in Iraq went to contractors, including $60 billion in reconstruction work, according to government figures.

As much as 15 percent or $8 billion of the rebuilding money was lost to fraud, mismanagement or corruption, according Stuart Bowen, special inspector general for Iraq reconstruction.

That reconstruction effort continues to this day. More than 8,000 Pentagon contractors remain in Iraq, including more than 2,300 Americans, according to the latest figures from Defense Department.

The thousands of reconstruction projects in Iraq ranged from basic infrastructure to airports to police stations and schools.

Precisely how much money went to local firms for Iraq work specifically isn’t clear, in part because many of the contracts mixed work taking place in Iraq and Afghanistan. But it exceeded $20 billion between the start of the war in 2003 and the end of 2011 when the last American troops left, according to economist Lynn Reaser at Point Loma Nazarene University.

“It’s very difficult to split out Iraq, but that clearly contributed to the peak of the spending in San Diego,” Reaser said.

Military spending in San Diego rose from 6.9 percent in 2001 to 8.3 percent by 2007. Contract spending by the Pentagon on private companies reached $7.1 billion in 2007, up by more than $4 billion a year from 2001.

Science Applications International, the county’s largest defense contractor, had nearly $3 billion in Pentagon contracts in 2008 alone, according to San Diego’s National University System Institute for Policy Research.

Among the local beneficiaries of all the Iraq spending was Stu Segall, who transformed a corner portion of his television and movie production lot in Kearny Mesa into a mock Iraqi village to train troops.

Shortly after the insurgency arose following the March 2003 invasion, contracts for the spinoff company he named Strategic Operations ballooned as commanders taught their troops how to operate in an environment where the enemy wore no uniform and where the number of unintended civilian shootings were growing.

“I’ve been doing this since right after 9-11,” Segall said in reference to the terror attacks of Sept. 11, 2001, that resulted in the invasion of Afghanistan and set the stage for the Iraq War. “I was in the entertainment business, and now I’m in the military training business.”

Segall hired hundreds of local residents, including Iraqi immigrants, to serve as role players in realistic training exercises designed to help troops distinguish friend from foe. It’s trained more than 700,000 troops since the Iraq War started.

His firm’s contracts during the Iraq period were critical in the business’s growth. Inc. Magazine reported the privately held company’s revenue grew from $13.9 million in 2007 to $32.1 million in 2010.

“They were big, and they were important,” Segall said.

Among them was a roughly $1 million contract in 2006 to help develop a “infantry immersion trainer” in a former tomato processing plant at Camp Pendleton.

“What we’re driven by is helping save lives,” said Strategic Operation executive vice president Kit Lavell. “We saw early-on that the war was really a counter-insurgency, so we began incorporating cultural and language aspects even before the military was really interested in that.”

The huge cadre of civilian contractors that emerged shortly after major combat ended included a large number security workers that some saw as a shadow army.

Danger was a constant for those workers as it was for most civilian contractors in Iraq. That reality struck the American consciousness in March 2004 when four Blackwater Security guards were shot and killed in an ambush in the volatile city of Fallujah. Their bodies were dismembered and two were hung from a bridge in what remains a brutal, lasting image of the war.

While no U.S. agency keeps a reliable database of civilian contractor deaths and injuries, at least 719 including 318 Americans were killed while carrying out contracts between May 2003 and August 2010, according to the Iraq reconstruction inspector general.

Most civilians went there to help in the rebuilding and take advantage of lucrative, war-zone pay, often earning the equivalent of a year’s salary or more in six months or less.

Former East County Republican Congressman Duncan Hunter, father of the current Rep. Duncan D. Hunter, headed the House Armed Services Committee during much of the war. He says contractors deserve the same type of credit given to troops for their service.

“The goal was to take a brutal dictator who was murdering his own people,” Hunter said. “The (Iraqi) military there has since held the country and the government has held. Everyone who wore a uniform or worked as a contractor should be proud of their contributions.”

Bowen, the man charged with tracking the billions spent on reconstruction, said a lack of detailed records stymied his efforts.

“Some of it was spent well, but much was not,” Bowen told U-T San Diego this week. “At least $8 billion in U.S. funding was wasted for a variety of reasons, the collapse of the security situation foremost among them. But the failure to consult effectively with the Iraqis, weak program and project management, and poor interagency coordination also contributed to the waste.

“Expenditures on training and equipping Iraq’s security forces probably produced the best results.”

Audits by his office revealed that the system developed for tracking contracts captured only about 70 percent of the projects actually performed.

The $60 billion was divided up as follows:

-- Iraq relief and reconstruction: $20.86 billion

-- Iraq security forces: $20.19 billion

-- Economic support fund: $5.13 billion

-- Commanders emergency response program: $4.12 billion

-- Narcotics control and law enforcement: $1.31 billion

A full accounting of how all those billions were spent, Bowen said in his final report, requires “combing through mountains of disordered electronic and paper records accumulated since 2003 that are currently stored in multiple locations across many agencies.”

His report carries recommendations he says would have saved taxpayers billions and urges they be employed in any future Iraq-style effort.

Those include creation of a combined civilian-military office to plan and carry out rebuilding and reconstruction operations and launching them only after sufficient security has been established.

Such efforts also should first focus on small projects and fully include host-country officials in program and project selection, according to Bowen.

Former Rep. Hunter agreed with the small-project assessment. Bringing in a generator to light a neighborhood, for example, often proved more beneficial than a large construction project, he said.

“You can fire up a generator and turn on the lights for a good share of a community,” Hunter said. “If you’re building an electrical plant, it won’t have any output for months or years. Smaller projects were less susceptible to sabotage while if a generator got blown up, you could bring in another one right away.”

He and Bowen said that money given to combat commanders in the Anbar province where the insurgent war was centered was among the most effective spending. Initially, commanders had the discretion to spend up to $25,000 on local projects or needs they deemed critical. That amount grew over time to several hundred thousand dollars.

“I did not see a single case of an American commander abusing the discretionary funds they were given,” Hunter said.